not vested
Safe Stocks to Buy: Starbucks (SBUX)
SBUX stock has been an underperformer for year-to-date fiscal year 2020. The stock has gained just 1.6%. However, I believe that it’s a good time to invest in SBUX stock.
The stock has a low beta of 0.81 and will help in capital preservation if markets decline. In addition, the company has an annual dividend of $1.80, which implies an attractive yield of 2%. Even amidst challenging times, the company increased quarterly dividends by 10%.
Towards the end of September, Cowen upgraded Starbucks. The Wall Street firm believes that the company is “implementing strategies that will pay off after pandemic.” As recovery gains traction in the coming quarters, SBUX stock is likely to trend higher.
Starbucks is already testing a fully plant-based breakfast sandwich at one location in Washington. This might just be the beginning of a bigger shift towards plant-based food.
The plant-based food market is expected to grow at a compound annual growth rate of 11.9% in the next seven years. Further diversification in the menu is likely to help the company grow.
The broad market valuations are stretched and investors will look for value stocks. I believe that Starbucks is interesting as a sales turnaround is seen in the coming quarters.
Source: Investor Place